Coca-Cola nears completion of US refranchising plan

By Mary Ellen Shoup contact

- Last updated on GMT

Coca-Cola Refreshments executives have formed a new bottler to operate territory that includes territories in the Northeastern US. ©iStock/bluebeat76
Coca-Cola Refreshments executives have formed a new bottler to operate territory that includes territories in the Northeastern US. ©iStock/bluebeat76

Related tags: United states, New york city, North america

Coca-Cola said it is on track to complete refranchising of its company-owned US territories by the end of 2017 after receiving agreements and letters of intent from a significant portion of the Northeast US.

“We still believe we can meet the deadline and get the US refranchised this year,”​ Coca-Cola CEO, James Quincey, said during the company’s Q1 2017 earnings call.

“Of course, we're not going to do the wrong deals for the sake of hitting a date, but we think the right deals are possible.”

Coca-Cola Refreshments executives Paul Mulligan and Fran McGorry formed a new bottling company called Liberty Coca-Cola Beverages LLC. They have also signed a letter of intent for territories that include metropolitan New York, Philadelphia, most of the state of New Jersey and part of Delaware, plus four production facilities, an area referred to as the Tri-State Metro Operating Unit of Coca-Cola Refreshments.

Including the Tri-State Metro Operating Unit, the company has reached definitive agreements or signed letters of intent to refranchise bottling territories that account for approximately 80% of total US bottler-delivered distribution volume, which equates to approximately 90% of total Coca-Cola Refreshments volume in North America.

The next step in the process is a finalized agreement followed by a formal closing, the company said.

10 years in the making

The work to refranchise its North American system began ten years ago, according to Coca-Cola, with the ultimate goal of economically aligning its bottling partners in North America to better serve its major customers in the US and Canada. This refranchising initiative led to the establishment of Coca-Cola Refreshments.

Since the closing of the transaction involving the North American territories of Coca-Cola Enterprises, Coca-Cola has accelerated the implementation of the new model by strategically addressing the bottling system, customer service, product supply and a common information technology platform.

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